Happy Bobby Bonilla Day! It’s that magical time of the year when the former New York Mets great collects a gargantuan check for having done little more than extremely savvy financial planning.
The 59-year-old MLB vet hasn’t played in a major league game since the late 1990s, but the Mets still pay $1,193,248.20 every July 1 and will continue to do so until 2035.
In possibly one of the greatest deferred comp strategies in professional sports, the team bought out Bonilla’s remaining $5.9 million contract in 2000.
Rather than give it to him in a lump sum, they agreed to the million-plus dollar payout at 8% interest for 25 years starting July 1, 2011.
Why?
The suits upstairs believed a major investment with a local money manager would pay off big and more than cover the generous terms they offered Bonilla, so they instead placed the almost $6 million with a guy named Bernie Madoff.
It didn’t quite work out as planned, and the rest, as they say, is history.
As ESPN noted, rather than be upset, the Mets, under owner and hedge fund manager Steve Cohen, have embraced the anniversary. “I hope everybody is enjoying my favorite day of the year, Bobby Bonilla Day,” Cohen tweeted Saturday.
The funny thing is that Bonilla actually has two deferred comp arrangements; his second is with the Mets and Orioles which pays him $500,000 a year for 25 years, which began in 2004.
And there are a number of currently active major league players making far less than Bonilla, including Adolis Garcia ($747,760), Jonah Heim ($745,660), and Spencer Strider ($1 million).
ESPN added that several other retired players have high-paying deferred comp arrangements, including Todd Helton (Rockies), Ken Griffey Jr. (Reds), Manny Ramírez (Red Sox), and Bret Saberhagen (Mets again).
So, ultimately, maybe it is better to annuitize.
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